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Bullion

Keywords

Monetary Policy, Central Banking, Communication Strategies, Banking reforms.

Abstract

The importance of concise communication in monetary policy making cannot be over emphasised . A g o o d communication of policy definitely strengthens the institutional independence of central banks and enhances the effectiveness of monetary policy. However, no one single method could fit all when it comes to designing good communication strategies because central banks face different constraints as they try to fine-tune their messages. With current reforms and financial liberalization, there is added impetus for increased communication between the Central Bank of Nigeria (CBN), market operators, stakeholders and the public in general. Monetary policy needs to be explained and well understood for the purpose of transparency and accountability. The study concluded that, the credibility is an attribute needed by the CBN, and establishing it is a challenge when there is a recent history of inflation being on the increase and no central bank can establish or maintain credibility through communications alone. It is what you do, much more than what you say, that is important in this regard. Therefore, the Bank should intensify its developmental efforts like the Agricultural Credit Guarantee Scheme, Micro Finance Scheme, and the SMIESS, which are all poverty eradication efforts.

Author Bio

The Author is a staff of the Central Bank of Nigeria Abuja

Publication Title

CBN Bullion

Issue

4

Volume

32

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